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Neil Barofsky News/Business. (2012) Former Special Inspector General Neil Barofsky on his new book, 'Bailout.' New.

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Washington 11, New York 10, Us 6, Tim Geithner 5, Paulson 5, Hank Paulson 4, Allison 4, Gm 4, Elizabeth Warren 3, Geithner 3, Shelby 3, Soundingboard 2, Obama Administration 2, Chrysler 2, United States 2, Kevin 2, George Bush 2, Pennsylvania 2, Manhattan 2, Goldman Sachs 2,
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  CSPAN    Q A    Neil Barofsky  News/Business.  (2012) Former Special  
   Inspector General Neil Barofsky on his new book, 'Bailout.' New.  

    September 23, 2012
    8:00 - 9:00pm EDT  

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>> the the first of the presidential debates wednesday october 3, live on c-span, c- span radio, an online ad c- span.org. next, q&a, followed by highlights from the australian parliament. later, the mercery senate debate between claire mccaskill and todd akin.
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>> i moved to the white house and was deputy general counsel and served under bill freely. after i got the job, someone who i known was integrated in washington. he was my political soundingboard. i didn't know how the politics of the city worked. bill who had been at the white house had a real fundamental understanding of those things. every time i would come up against a brick wall or
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really very touchy tricky mess i gotten myself into, bill was there as soundingboard to help navigate and let me know how the town work and how i can use congress to effectively help me when i was running certain roadblocks by the administration. generally to buck me up sometimes when i gotten beat down and overwhelmed. bill would help me give focus and remind me that i had an opportunity with this job not just to provide oversight over the $700 billion bailout. >> what impact did it have on anything when he was a republican in george bush administration and you were a democrat? >> coming up from new york, politics were never much of an issue. we were colleagues and we
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became friends. we had a shared mission. politics is not something we talked about much. i had friends i probably didn't know they were republicans or democrats until later. bill was also very good friends with chuck schumer legal counsel and went on to become an obama mom -- nominee. our interaction really weren't about partisan politics. >> you lead off this story with a man named herb allison. who is he and what role did he play and what's that story about in the beginning? >> herb was at the time, was the assistant secretary of financial stability. which meant his job was so oversee the implementation of t.a.r.p. the $700 billion funded bank bailout. prior to that, herb had a story career on wall street. he had just about every
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major job you could imagine merrill lynch. he then went on to become ski at tia craft. then, in april 2009, he came in eventually made head of t.a.r.p. my interaction with him was providing oversight and many times very critical of the things he was doing that the treasury department was doing that secretary geithner was doing. he was my main portal into terry. we had a number of conflicts as you can imagine. our jobs were not necessarily going to create a long lasting friendship. it was my job was to
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criticize him and make recommendations where i thought he and the program gone off the rail. which by 2010 was pretty often. we sat and had a meeting offline to clear the air and can have a couple drinks and diffuse what was a building tension between us. our weekly meetings diinvolve into shouting match. after the meeting, i got a real taste how washington works. we had a chitchat and small talk about our families. i told him my first daughter was about to be born. he talked to me about his commute to washington and back and forth to connecticut where he lived. he eventually turned the conversation and pointed out i was young, my job is special inspector general. sort of asked me what my plans were and what i wanted to do next.
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as we started discussing t we gave me a warning. he was i was doing myself real harm for my future prospects in his words. by that, he explained had had a harsh tone. i was critical of wall street and very critical of the obama administration as i was carrying out my job. we warned me if i didn't change my tone, it was going to hurt my ability to get a job after sigtarp. when i left the government to get a job on wall street, i was doing myself real harm. when i, plained i wasn't interested in that, he said even within the administration. i changed my tone and good things would happen to me. he mentioned a obama appointment as a federal judge. at the time, when i heard that conversation, i thought i was being threatened or bribed. i thought i was hearing, basically you don't shape
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up mister, you will ruin your entire career. if you change your tune, good thing can happen to you. later i realized he explained to how washington works and what it means to be a regulator in washington. that means pull your punches, go with the flow and roll and great things can happen to you including a rich career on wall street. but speak your mind and be effective. >> herb allison came from merrill lynch. also rain the john mccain operation. here is are some video i want you to see and fill in on this. [video clip] the sigtarp had suggested dozens of ideas to us and we look back and we've accepted in a way very similar accepted the sigtarp's recommendations about three fourths of the time. there are some cases we
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have determined that in the interest of financial stability and because we can find other ways to protecting the taxpayer, that we decline to implement. one of these cases has been the creation of a wall. in many cases, here i draw upon 35 years of experience in the financial services industry, in many cases, it makes great sense to have a wall to separate asset managers in area from asset managers in another. in the case of asset managers we're hiring on behalf the taxpayer. we want to have their best talents working for the american taxpayer. >> one language i want to ask but later, what was your feeling? this is a man who's been enormously financial successful, he's in the treasury department and you're there. how can you have any power over him and in the job
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you've having? >> all i really had, we had power of logical argument. what i learned over time from advice from others as well as just sort of figuring out, i wasn't really going to be able to directly influence treasury officials. i can do my recommendation. if they will be easy to implement, they would probably take them. herb mentioned that they did adopt a number of them. for the big issues, they intended to at least initially ignore us entirely. what i learned was, i had to use the press and congress to try to get external pressure on treasury to see what we were doing. that was a great example on this is one of the t.a.r.p. programs rolling out that we identified very significant problems. through our reports, we would file quarterly reports to congress
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interacting with the press to make sure they understood what our issues was and try to explain to them and easy to understand. we were able to get congress engaged and through my communications with congress and being constant telephone and going up and down to the hill as much as i can to explain our view, we were able to get external pressure. members of congress would put pressure on treasury to better protect the taxpayers. >> when is sigtarp, that was your title? >> special inspector general for the special asset relief program. when congress passed in 2008 the act that gave treasury to bail out the banks $700 billion of taxpayer money, they created this brand new entity called sigtarp. our rule was to provide oversight. we were like the mini fbi.
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second part was oversight mechanism where we will do reports congress every quarter and special audits we will do. >> where did you get your authority? >> from congress, from this legislation. it provided that we had all the authorities of any inspector general which are these similar type of oversight agency that's are attached to each department and many agencies within the federal government. >> you say in your group, you weren't terribly impressed by the number of inspector generals. how many are there? >> there are 64 or 65 different i.gs. when i came down to washington, i didn't know what an i.g. did. my experience as a prosecutor, we run into law enforcement arms and they will be our agent. i started up a mortgage fraud unit and i was dealing with the inspector generals.
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i didn't know the big picture of what an i.g. was doing. the first thing i did was go around and meet the different i.g.s. starting with the meetings over the next couple years, i found the inspector's general unfortunately they suppose to be these fierce watchdogs looking out for waste, fraud and abuse. those are the magic words written into their statute. it really become more often like any governmental agency. number one concern is things about the budget and how to preserve budget. they were worried about clashing with management, worried about too much interaction with congress. it was really very much go along get along type of attitude. i kept hearing over and over again, there were three different type of i. g.s. a lap dog who will curl up to management and a junkyard dog.
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ultimately, when i was going through the confirmation process, i was told the head of finance committee, which oversaw my confirmation hearing, i needed to be a junkyard dog. i shouldn't be too aggressive and be like a watchdog. it seems i.g.s were worried about keeping their jobs than being that strong advocate for the taxpayer. >> quick question, 64 inspectors general, does the public get its money worth? >> sometimes. think there are some i.g.s who do their job well. there are some -- usually those are the ones you hear about in the news. when glenn was the d.o.a., he helped lead the investigation to lead motivational firing of u.s.
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attorneys. often, you don't hear about them, know about them. i was onced ask a question why a particular agency didn't have a i.g. doing what we were doing and turned out they did. you never heard of them because they are so not out there. they are so not aggressive. i was once told i.g. point-blank he wished he could do what i was doing and he was afraid for losing his job. that's one of the problems, they live in fear of being fired they are too aggressive in carrying out their duties. >> quick background update, you wept to graduate school where? >> university of pennsylvania. >> graduated what year? >> '92. >> got your law degree from what school? >> university school of law. >> you're back teaching law? >> i am >> you were born where? >> pennsylvania. >> grew up where? >> lived in that area also in new york, minnesota, and
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south florida. >> mom and dad, what did they do? >> in florida they had a small travel agency. >> when did you get married and how many children do you have? >> married on 8/8/08. had two kids, one is about two years, four months. >> how long were you a prosecutor in the southern district of new york. >> eight years. >> what did you prosecute? i started doing narcotics and doing international narcotics. then i switched over to security fraud. >> you spent how long in washington in the government in the treasury department? >> 27 months. >> starting what day? >> started on december 15, 2008. i stepped down on march 30, 2011. >> in the process of over sight, here is senator richard shelby talking to you about what you should
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be doing. >> this an important job. [video clip]. lifetime of public opportunity. you might be unemployable after you do this. you know and i know that these people have got to fear you and your office. if they don't fear you, they're going to play with you. they're going to deny you this. senator dodd want you to tell this committee what you need at all times. if somebody stifling you, we want to know. >> what kind of money did that congress give you to spend in your job? >> originally outlay of $50 million. >> for how long? >> basically until we ran out of it. then when we went back, then we would have to go through the normal budgetary process to get additional fund. i would say in this age of
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lot of agency, getting to not funding, we never had a problem. we were always more than adequately funded and senator shelby kept good on his promise as did congress to make sure not only did we have the adequate resources but that type of support and backing was instrumental especially from both parties. the republicans as you can see from senator shelby and also from the democrats. probably even more importantly from the democrats one of the obama administration took over that they also strongly supported what we were doing. >> former senator from kentucky had this to say to you during the confirmation process. [video clip]. the bailout law allowed $50 million for your office. you will have a very ample amount of resources. but i have serious concerns with your nomination. the nominee maybe a
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dedicated public servant, he appears to be a skilled prosecutor and a man of integrity. i wonder why taxpayers should have to pay $50 million to a watchdog who will have nothing to watch. ultimately, i believe mr. barofsky with his impressive legal skills can serve the public far better in new york where he can continue to prosecute fraud. >> where was senator burning come -- burning coming from. >> he was opposed to t.a.r.p. in the first place. that's understandable concept. there's a lot of people out there feel more government agencies is not the solution. i will say eventually, i
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brought senator buning over to our side. one of the most remarkable, he said i did a pretty good job. from senator bunning was a remarkable implement. he was coming from an understandable place. on the other hand, as an agency, we more than pay for ourselves many times over. in one case, we kept more than half a billion dollars going out to ongoing fraud because of our investigative function. >> what does it say to the american people that we need 64 inspectors general and we have to have a $50 million expense to keep people honest inside the government that we elect? >> i would say with respect to this program, it was extremely necessary. the reason why, when you have a program like this, which is designed at its outset to bail out banks and help wall street, the people running that program
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within treasury all came from the same mind set. this was the same hank paulson under president bush and continues under president obama with treasury second tim geithner. their biggest concerns was protecting the banks, protecting the financial system. but they didn't have people who were sensitive to the issues the fact that you're shoveling hundreds of billions of dollars out, you have real vulnerabilities to fraud. they are not as attuned to conflicts of interest. they weren't cognizant of the fact you need a degree of skepticism. our role and i think what the role of our i.g. should be is to be that voice of the taxpayer. to be that institutional concept of pushing back when money is being pushed out when not enough strings
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attached. frankly if you have a career at goldman sachs, you're not going to be sensitive to money pushing out. the banks and executives would never, ever, take advantage of the taxpayer by putting their profit interest over that of the public interest. i think our voice was one skepticism to help rein that back in. >> prosecuted somebody by the name of antonikhic. >> he was the ceo of small bank in new york that tried to get t.a.r.p. money by cooking its books. committing a accounting fraud to make sure they had more bank capital. which is basically a cushion banks has for
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losses. he had engaged in some trickery to make it look like the bank was healthy than it was. $11million of taxpayer fund. we worked to investigate him, to prosecute him, ultimately, he pleaded guilty to those charges. >> here's a list of all the acronyms that you use in your book. i listened to your book in the car, you got used to hearing t.a.r.p., sigtarp, cdo, cpd and siger. how does the average person understand what those mean? >> you have a hard copy, we have a glossary which helps explain these different terms. it's government. really tried in the book to make it as understandable but unfortunately
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sometimes, just conversationally trying to recounting the conversations that we had, we refer to home modification program as that. >> what was hamp? >> it was the program that the obama administration launched to try to meet the original requirements that congress put forward that t.a.r.p. used not not just to help the banks by bailing them out. but also do something about the foreclosure crisis that was raging in 2008. congress insisted when they gave treasury authority to bail out the bank,s, also do something for homeowners. now intention to hundred up to 4 million people stay that their homes. >> how many has it helped >> i think it's around 800,000 now. in the book we talk a lot about the program design laws but also some of the intentions behind the
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program. recounts conversations i had with secretary geithner that the program was really more about helping the banks survive the crises. >> how much politics was played with hamp? >> tremendous amount of politics. in the way they fought back against some of the recommendations that we made to try to deal with the foreclosure crisis head on. later how they define success under the program. they originally said up to 4 million people will get help by the program. they said, that was never our intent. our intent was to make four million offers. whether people accepted those offers and whether modifications were acceptable, that wasn't part what we wanted to do >> as a democrat all your life and you're sitting in this job first in the
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george bush administration. what was the feeling you had with hank paulson and tim geithner when president obama came in? >> i anticipated major political changes. substancely, there was almost no difference. that level of deference to the banks was the same under the paulson administration as it was under the geithner administration. on a permanent level two were very different. paulson was welcoming and he sworn me in my first day. he sent out a message out to the treasury department, he wanted to make it work with sigtarp. my first day they were about to multithe money -- put the money into the auto industry. geithner was much more dismissive. i didn't meet with him all that often. maybe a couple meetings at times, he was very combative, at times
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profane. stylistically, there was a difference. substancively, unfortunately, we really saw a lot of the same which was pushing back what we thought common sense approaches to protect the taxpayers and bring more transparency. >> put this into the equation. here is elizabeth warren questioning tim geithner. [video clip] if if you -- in you look where the government acted earlier. in that context, both in the kinds of fannie and freddy, we were clear that the conditions will changes. >> i'm sorry, you're saying that there have been changes in management? >> absolutely. >> that receive t.a.r.p. fund? >> as i said n the context in the interventions taken in fannie and freddy. >> i'm asking about the financial institutions. >> the principle is important in this case. i said it publicly, going
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forward, where institutions need exceptional level of the system, we will make sure conditions to help ensure firms merge stronger. >> had did see there -- >> what did you see there? >> i saw a classic refusal to answer a question. what elizabeth warren was asking -- she came back a couple times and she would do. he wouldn't answer the question. the answer to the question was obviously no. they kept their jobs and bonuses and they kept their rich compositions. those bonuses were restored for executives. rather than to answer the question, you can get
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classic washington bob and weave. which is a practice art in this town. >> the average person watching, they head must be spinning. we live here and it's spinning. you got elizabeth warren sitting in a senate hearing room, she's not a senator, questioning secretary of the treasury. you all are really all democrats all apart of an administration of sort. you had a lot of lunches with her during your time when you were the sigtarp. >> she was the head of another oversight entity that was created in that same t.a.r.p. legislation called the congressional oversight panel. congress wanted to have its own eyes and ears. this a body of five panelist, three democrat and two republicans. elizabeth was named its chair. we had different roles
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providing oversight. we were part of the executive branch. a lot of our job was helping with program formation as well as our law enforcement goal. they had more of congressional type of role, which why they had the ability to call hearing and take testimony and bring transparency in that way. they tried to take a more academic approach. >> public says, we got united states senator, why can't they oversee this? >> they brought a very specialized skill. on the panel, you had some members of congress and you had professors like elizabeth warren. they were able to comb through their own budget and bringing array of experts. could congress have done it? probably. with this level of specificity and depth, i don't think you would normally see that from a congressional.
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>> what it does it mean hank paulson, had been ahead of goldman sachs. and tim geithner secretary of the treasury had been head of the new york fed. is that good for us or bad for us as the public? >> there's good things and there are bad things about it. the good thing is when you're in the midst of a financial crises, there are some benefit of having folks who come from these wall street institutions. new york fed as a regulator, that sits in the new york city, deals on a daily basis of commercial large bank. >> let me ask you a question. if i worked for new york fed and i get a check from the federal government? >> it's an interesting question. the federal reserve is very much part of the federal government. the new york fed is this
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private institution in their litigation when they trying to beat back disclosure requirement under the freedom information act. they'll say they're a private corporation, obviously they're much involved in carrying out public policy. the check probably says new york fed. they are funded by dues they collect from the bank as well as money they earn carrying out government functions. it's not entirely clear but mostly they serve a government function. >> you will serve the same role bill burk did for you. with somebody coming to you saying i've been asked to go into peck your future crisis to be an inspector general. what advice would you give them? >> stay home. if you do go in, understand
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that you're going -- something i do not appreciate. a political mind field that you really can't imagine. bailouts were very politicized first going in. there's going to be tremendous amount of pressure on you to shape your job and shape your report and how you approach what you do. i was constantly approached about things i shouldn't be doing outside of my role. i wasn't suppose to get involved with policy decision. i wasn't suppose to get involved with program information. i wasn't suppose to talk to the media. you will hear all of this advice. ultimately, go back to your statute and see what created you and stick to what you suppose to do. ignore all the political noise and do the job.
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if you're presidential appointed and the president appointed you to do. which is to represent the taxpayer the best you can. >> 2008, you report for duty. first of all, what is t.a.r.p.? >> t.a.r.p. stands for the troubled asset relief program. the original idea behind t.a.r.p. we were in 2008 and the banks were just hemorrhaging losses. huge amounts of losses are mostly coming from real estate or we had a huge bubble in this country in housing. lot of banks had a lot of exposure through complex instruments. look at it, and it took a lot of the banks who had investment in housing down with them. that created airline sorts of runs -- that created all sorts of runs in the banks. the idea of t.a.r.p. was to create assets and bonds
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made up of bunch of mortgages and other bonds made up of bunch of other bonds. the government will buy them from the bank to try to stop the bleeding. that's what a lot of members of congress thought they were voting for when they voted for t.a.r.p. >> what's an rmbs? >> rmbs, is a residential mortgage backed security. in simplest terms the way to think about it, in the runup to the crises and even before that, financial institutions would take a whole bunch of mortgages and put them together into a box. people would buy different parts of the bond. when people invest in the bond, they will be getting a claim to each the monthly payments that everyone has a mortgage behind that bond would make. thousands and thousands of mortgages get put into one bond and people invest in that buy buying these bonds which give them a right to
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those incomes. those are called mortgage backed securities because it's the mortgage that backs the bonds. >> we still have them? >> they are still there. really the private market for them where wall street was putting them together, has almost disappeared. right now it's almost entirely government funded. >> what is p-pip? >> it's private government program. this is originally envisions to be a trillion dollars program that was going to help ultimately buy those same toxic assets. after t.a.r.p. was passed, the money wasn't used to buy the bonds, it was used to plug the holes banks directly by buying shares in their stocks. the ppip was an idea of
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marrying up private money to recreate that idea of buying these rmbs and other things created from them ultimately, the program was a failure. i think it's maybe 20 or $30 billion that got spent? >> what's a cbo? >> it's got a -- when people talk about trouble and toxic asset. this is what they were talking about. they will take a whole bunch of mortgage bonds and package them together. >> you're talking about the different levels of the trenches? >> yes. >> is that a bad deal if you're outside looking in to buy a cdo? >> ultimately because the way they were created. they were created with some of the most poorly
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performing mortgage, some of the riskiest mortgages. mortgages that were riddled with fraud because the banks were putting them together and didn't care about the performance were. these all got a concentrated in the cdos. and when the cdo blew up they took the financial down with them. >> one more talf >> this is also part of the federal reserve program. what it tried to do with moderate success was to try to bring back whole other way that a lot of consumer loans in this country gets funded. things like auto loans and student loans. different types of loans get bundled up in other type of funds. >> here's senator tom carper talking about the gm
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bailout. [video clip] >> my recollection was gm made some replacements. i want to say $67 million. certainly taking one money out of one pocket. can you just refresh my memory on that? >> ultimately part of the $49.5 billion we received equity in return. part of it was approximately $7 billion long. that money was repaid by money came out of that t.a.r.p. excrow -- account. >> when you see this, how are we suppose to understand this? in the end, what's the deal on gm? was the bailout the right thing to do? did they pay their loans
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off? >> this is sort of an example, i think, of government and the treasury department taking a perfectly good story and then trying to make it look a lot better than it was for pr purposes. as a result, you end up with this confused mess. what happened here is that gm paid back part of its loan. we're still on the hook for tens of billions of dollars for general motors. we own shares of their stock. another part was through a loan. ultimately when they repaid that loan which was made from big announcements from the white house and treasury department, they used other t.a.r.p. money that they had received as part of the bailout from some of that stock we had and used it to pay off the loan. it was good news they paid back the loan. this was a lot of t.a.r.p. money sitting around that they didn't need in order to keep the money afloat.
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this was a good thing but they didn't disclose where the money came from. part of my job was to rein on the parade a little bit and clarify where the money was coming from. we saw that a lot inform t.a.r.p. we see that a lot government. as a bigger question, it's very hard to say what would have happened had we not bailed out gm and chrysler. the estimates of the job losses are all over the map. all i know from my own experience being in hank paulson office on my first day, him telling me if they didn't use t.a.r.p. funds to bailout gm and chrysler, those institutions will go bankrupt and disappear. impact on our economy at that time i think was too
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frightening to contemplate. >> you talk first couple days and paint that picture if you would again. where your office was located. what it looked like and what you found when you got there and the secretary of the treasury and mr. allison's office and the inspector general of the treasury department. what was the difference? >> i went through my interview process. i went through different offices around the treasury department. i saw the different treasury officials one looked like a museum. it was like a part of the tour of the treasury department. then, after my meeting, i got sworn in by secretary paulson. we just kept walking down the stairs and down the stairs and down the stairs. eventually, hit by the smell of bacon and eggs.
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we walk into very dismal basement office where we had this smell, i'll never forget. it was there for months. we later found out it was a sewerage pipe underneath the office. instead of views of the white house, all we had was these gated windows where you can see the ankles of people walking by. i come from a pretty 70 style building from manhattan when it's at the u.s. attorney's office. it was quite a contrast seeing what the palatial offices which was senate confirmed official and seeing where they dumped us. >> in your office and you try to get a meeting with
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tim geithner. does he have any say over your life when you're in that job? >> i was a big plan of contention. the way we view the statute and congress wrote the bill, made it clear in our view, we were an independent agency within the treasury department. which meant that essentially the president of the united states had the ultimate authority over me. he could fire me at will. didn't need to have any reasons or cause. but ultimately we operated independent of any supervision from the treasury secretary. they like that. they went to the department of justice and sought to get a ruling that i was under his supervision. which would have given secretary the authority to shut down audits he didn't like, shut down investigations he didn't like. we ended up fighting tooth and nail to help push back on that and ultimately they walked away from that
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fight. >> your most contentious moment with tim good nighter . >> we had a meeting i asked for. we thought that was a real failure in transparency and there have been other transparency failures that followed. i wanted this meeting to personally impress upon him. i've become saying to herb allison and his predecessor, but i haven't had a chance to voice it to the secretary, they are really doing themselves harm, doing the country harm and doing the president harm. there was this perception out there had ballouts was a giant transfer of wealth from the taxpayer to a handful of executive and the secrecy of not being transparency that could last and impact. i really wanted to make a
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patch and plea they needed to are reverse these policies and be more transparent. as i laid that case out to him and it's plained to him he was not being transparent, the meeting cot contentious. he mildly disagreed with my contention. he used a lot of obscenities in expressing his view that he has been one of the most transparent secretaries in the history the country. it sort of follow this pattern for about 40 minutes of explosives obscenity and tirades against me. i'm not complain being that. still inside, i'm just a prosecutor from manhattan and also i got one of the most powerful officials in the world dropping f-bombs on me. my deputies come with me from new york, we looked at
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each other and remarkable thing. here we are trying to advocate for what we think pretty common sense changes and deep level of animosity. >> you were 39 when you took the job. >> 38. >> are you 41? >> 42. from how hold was tim geithner? >> i'm not sure. i think he just turned 50. >> is he a lawyer? >> no. >> i would say to myself, i'm the secretary of the treasury. this guy just a former prosecutor. i'm the cabinet. he's just a guy near the kitchen smelling the pipes underneath, how should i put up with his nonsense? >> secretary paulson understood as a prosecutor and someone not outside of that wall street bubble.
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paulson and geithner surrounded himself from people from goldman sachs and merrill lynch. that's a valid voice to hear. even if you disagree with that voice, even if you think that voice is wrong, it's valid to get that input. you have something to pierce echo chambers. >> what was tim geithner movie -- motive in all of this? >> i don't want to speculate on his motive. it's the ideology what's best for the banks is best for the country. when the banks were telling him that more transparency would be dangerous. the things i heard more transparency, things like how they spent the money could be easy to gain, it could be dangerous, it
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could take down t.a.r.p. and the banking system. he accepted those voices from wall street without questioning them. i was trying to give him counter arguments. it was completely invalid. that's a real sense, if you're not among those bankers, you really have no business having an opinion. >> who is tim assad? >> he worked as chief counsel for t.a.r.p. when herb allison stepped down in early october, 2010, he took over. >> here is a protocol issue that you write about in your book when tim and yourself at a hearing. let's watch. [video clip]. >> we would ask that your full written statements be placed in record and that you limit your opening statement as close as possible to five minutes. as with the custom of my predecessor, will you see
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three lights. green means continue to go, yellow is the warning that you should not run through our intersession and red in all 50 states, moons stop. thank you mr. chairman. the normal rule of committee is that we go in order of rank. i believe you will be first. >> thank you mr. chairman. >> we don't go with the testimony. what rangled you about that moment? >> when i came to washington, i didn't get a sick leave for protocol. didn't understand it and usually violated it. under protocol, i was a presidentially appointed senate confirmed official. any degree of protocol i should have gone first.
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the funny thing now, i saw red. i was so upset at slight that i had imagined. afterwards i went to my legislative director, you need to tell his staffer there's 100 senators that say i outrank him he's got to understand the basic rules of protocol. i told my wife about it and she burst out laughing. she's basically what's wrong with you. what happened to you? i looked at her and i realized, my god, she was right. really that night, i started working on my letter of resignation. this is part of the influence of washington and of power. i had so much become part of this system that i was now getting upset about something that's trivial and stupid about who testifies first. at that point, i was thinking about stepping down. i think this is in january
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of 2011. that really solidified it for me that i was becoming very mechanisms of power i detested when i got there. >> you said a lot of good things about your deputy. let's watch. >> [video clip] if you add all of those programs up and assume every program was fully subscribed at the same time, you get a total amount of support from the government of $23.7 trillion. we've made it clear in the report that we're not suggesting that's $23.7 trillion worth of potential loss. some of these programs involve seg amount of collateral. some of the programs have been discontinued or some of the money has been repaid. if you look at all 50 programs, is the total amount of support available under these programs, if you add it up, it's $23.7 trillion. >> is there any way to make this simple to understand?
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$23.7trillion. who can understand that? >> the way to understand it, when we had a financial crises, the government was in panic. they were worried about the next great depression and they threw the kitchen sink at the financial system. that includedded $700 billion, which is the .7 in that number. it included wide array of guarantees. if you add them all up, the number comes to 23.7. that includes for example, more than $3 trillion to guarantee all the money market funds. all the money market funds weren't all going to fail at once. but the significance the government said, even if they did, we put. 23.7
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23.7 -- $23.7 trillion. we thought it was important to get that number out there. we thought it was important for congress to know, american people to know and frankly i wanted to know. i didn't know what that total number was and no government agency had done so. they can understand, just how broken our financial system was and just how extraordinary the government response had to be. actually, kevin was given that response they created this huge controversy and numbers got twisted out of context. what was probably most surprising was the attack that we get from the what is white -- white house and the treasury department who we thought will be supportive. >> you hired a chris from
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siger, who ran that inspector general for iraq, why did you hire him? what was the reason? >> she came in when i was interviewing -- i started off, it was just me and kevin. i realized we needed a press person. i had no idea how to deal with the media. when chris came in to interview, it was like she was explaining another world that i had no idea existed. the first thing she said to me, i'm not going to lie for you. i said, i never asked you to lie for me. she explained how the press works and how she believed it was important for this agency to be completely up front with the media. to never spin and do at love the tactics that a lot of agencies do which is off the record or on background which is telling the press
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something and not putting your name behind it. people will say, you can say anything when your name is not attached to. you can lie and you can exaggerate. she was saying we're not going to play any of those games. we're going to be straight forward and tell the truth. we will expose when we make a mistake and admit them. her strategy we will build up so much credibility with the media and congress that we're under attack and she saw we will be attacked. i really didn't think of that back this december of 2008. we would have this level of credibility that we could use to fight back. i was ready to hire her on the spot. i never met anyone like her. >> in the end, how many people worked for you? >> think when i stepped down, we were around 120 and 130.
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>> is there still a sigtarp? >> there is. it will continue as long as treasury has outstanding assets. >> we've been given the impression that the t.a.r.p. money was paid back. >> a lot of the t.a.r.p. money has not been paid back. we still have exposure to aig to general motors. there's hundreds of banks that have not repaid their t.a.r.p. funds. we still have a hamp program still limping along. that's still an active program. >> big banks paid money back? >> larger banks mostly paid back. allied financial big bank still owe money. >> this book, "bailout," who do you want to read this? what will give you the most satisfaction? >> i want everyone who vote to read this book. i want people who understand and who care about the financial system
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and what's happened to our government. i want them to read this book. there's so much anger out there. >> are you angry? >> i'm furious. i'm still angry. part of the reason why i wrote this book. there's an anger out there that people understand and kind of get that washington isn't being run for them but it's being run for the interest of these financial elites. small groups of too big to fail banks and executives who welfare has been put before the american people time and time again. they understand that on the left on occupy and understand on the right tea party. lot of folks understand in between. often times, there's sort deriding as crazy. i wrote this book so i can give them the everyday -- evidence for their anger. i try to bring the reader along with me. those are people i want to
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see so they can understand that they're anger is justified and frankly for people who aren't angry, i want to make them angry. >> when new york university hired you for law school, did they give you tenure? >> no, i'm an adjunct. which means i teach classes and senior fella. i'm no a full professor. >> when you wrote this book, you had to sit down and think about what would happen to you later. you ever expect you will be hired again by a government agency because of this book? >> it goes back to that conversation, if you don't change your tone or what senator shelby said, being employed again. i did think about that. part of the struggle i had deciding to write this book or not would blow up bridges. it's going to close off certain career path >> anybody call you and said i don't like your book? >> no. i've gotten a lot of people say they did like the book. i haven't heard from
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anyone. >> who will like it the least? >> i think the people who are exposed. i think if you're an executive at a too big to fail bank, you will not be happy with this book. >> some of those on the front cover? >> the fact that i called for her institutions to be broken up. the official who are named and i named the names. i lay out the conversation whether it's secretary geithner or the people that i was working with. >> i don't want to ask you about who you're going to vote for in politics. would it make a difference, based on what you've seen, if either the republican or democrats win in november? >> what i seen so far, unfortunately no. i think both candidates at this point, have only cometted to continue -- committed to continuing